What is Beta of a Stock? What is the expected return of a stock according to...

What is Beta of a Stock? What is the expected return of a stock according to the CAPM model?

Expert Solution

jeff jeffy answered 2 years ago

A stock has an expected return of 0.08, its beta is 1.5, and the expected return...

A stock has an expected return of 0.08, its beta is 1.5, and the expected return on the market is 0.1. What must the risk-free rate be? (Hint: Use CAPM) Enter the answer in 4 decimals e.g. 0.0123.

A stock has an expected return of 0.13, its beta is 1.44, and the expected return...

A stock has an expected return of 0.13, its beta is 1.44, and the expected return on the market is 0.09. What must the risk-free rate be? (Hint: Use CAPM) Enter the answer in 4 decimals e.g. 0.0123. You own a portfolio equally invested in a risk-free asset and two stocks (If one of the stocks has a beta of 1 and the total portfolio is equally as risky as the market, what must the beta be for the other...

Stock J has a beta of 1.5 and an expected return of 15%, while Stock K has a beta of .75 and an expected return of 9%.

Stock J has a beta of 1.5 and an expected return of 15%, while Stock K has a beta of .75 and an expected return of 9%. You want a portfolio with the same risk as the market. What is the expected return of your portfolio?Group of answer choices10 percent11 percent12 percent13 percent14 percent

A stock has an expected return of 12.66 percent. The beta of the stock is 1.5...

A stock has an expected return of 12.66 percent. The beta of the stock is 1.5 and the risk-free rate is 5 percent. What is the market risk premium? (Answer in a percentage, but do not include the % sign and round to two decimal places, i.e., 18.35)

Stock a has a beta of 0.69 and an expected return of 9.27 %. Stock B...

Stock a has a beta of 0.69 and an expected return of 9.27 %. Stock B has a 1.13 beta and an expected return of 11.88 %.Stock C has a 1.48 beta and an expected return of 14.26%. Stock D has a beta of .81 and an expected return of 8.71%. Stock E has a 1.45 beta and an expected return of 15.04%. Which of these stocks is correctly priced if the risk free rate of return is 15.36 %...

5) A stock has an expected return of 0.14, its beta is 0.94, and the expected...

5) A stock has an expected return of 0.14, its beta is 0.94, and the expected return on the market is 0.07. What must the risk-free rate be? (Hint: Use CAPM) Enter the answer in 4 decimals e.g. 0.0123. 6) You own a portfolio equally invested in a risk-free asset and two stocks (If one of the stocks has a beta of 1.77 and the total portfolio is equally as risky as the market, what must the beta be for...

A stock has a beta of 1.07, the expected return on the market is 0.11, and...

A stock has a beta of 1.07, the expected return on the market is 0.11, and the risk-free rate is 0.05. What must the expected return on this stock be? Enter the answer with 4 decimals (e.g. 0.1234).

A stock has a beta of 0.56, the expected return on the market is 0.06, and...

A stock has a beta of 0.56, the expected return on the market is 0.06, and the risk-free rate is 0.04. What must the expected return on this stock be? Enter the answer with 4 decimals (e.g. 0.1234). You own a portfolio that has $2,367 invested in Stock A and $5,423 invested in Stock B. If the expected returns on these stocks are -0.06 and -0.12, respectively, what is the expected return on the portfolio? Enter the answer with 4...

A. Alpha and the CAPM A stock with a beta of 0.77 has an expected return...

A. Alpha and the CAPM A stock with a beta of 0.77 has an expected return of 12% and an alpha of 1.5% when the market expected return is 13% . What must be the risk free rate that satisfies these conditions? 2.14% 2.13% 2.16% 2.15% B. Portfolio Beta An investor places $6,000 in Stock A, $5,000 in Stock B and $12,000 in Stock C. Stock A has a beta of 1.05, Stock B has a beta of 1.25 and...

Expected return of stock Alpha is 8 percent and of stock Beta is12 percent. The...

Expected return of stock Alpha is 8 percent and of stock Beta is 12 percent. The standard deviation of the stocks are 13 percent and 18 percent respectively. The correlation between these two stocks is 0.4. If the portfolio manager has decided to invest all the funds that he holdsin some proportion in these two assets. The expected return ofthe portfolio based on this proportion is 11.5%. What are the weightsin each of the stocks? What isthe standard deviationofthisportfolio?

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